ports - ibef · for updated information, please visit 8 there are two basic categories of ports in...

11

PORTS

AUGUST 2015 For updated information, please visit www.ibef.org

22For updated information, please visit www.ibef.org

Executive Summary…………………………3

Advantage India……………………….……..5

Market Overview & Trends………………….7

Porter Five Forces Model Analysis ………18

Strategies Adopted………………..……….20

Growth Drivers………………………..…….22

Opportunities………………………………..39

Success Stories………………..………. ….41

Useful Information…………………………..47

PORTS

AUGUST 2015


Source: Ministry of Shipping, Planning Commission, TechSci Research

Notes: E – Estimates, , MMT - Million Metric Tonnes

PORTS

By FY17, cargo capacity in

India is expected to increase to

2,493.1 MMT from 1,806.8

MMT in FY15

Increasing trade activities and

private participation in port

infrastructure set to support

port infrastructure activity

By FY17, cargo traffic at major

ports in India is expected to rise

to 943.1 MMT from 581.3 MMT

in FY15

India has 12 major ports

By FY17, cargo traffic at non-

major ports in India is expected

to grow to 815.2 MMT from

471.2 MMT in FY15

India’s 187 non-major ports are

strategically located on the

world’s shipping routes

EXECUTIVE SUMMARY … (1/2)

AUGUST 2015

CAGR: 27.4%

1806.8

2493.0

FY15 FY17

CAGR: 17.5%

581.3

943.1

FY15 FY17 E

471.2

815.2

FY15 FY17 E

CAGR: 31.5%


Source: Ministry of Shipping, Planning Commission, TechSci Research

Notes: E - Estimates, TEU – Twenty Foot Equivalent Unit, MMT - Million Metric Tonnes

PORTS

By FY17, container demand in

India(For major ports) is

expected to increase to 21

million TEU from 8.0 million

TEU in FY14

Trade to boost demand for

containers

By FY17, iron ore traffic (For

Major & Minor ports) is

expected to rise to 228 MMT

from 43.6 MMT in FY15

Infrastructural development to

increase demand for iron and

steel

EXECUTIVE SUMMARY … (2/2)

AUGUST 2015

8.0

21.0

FY15 FY17(E)

CAGR: 62.0%

43.6

228

FY15 FY17(E)

CAGR: 128.7%

ADVANTAGE INDIA

PORTS

AUGUST 2015

66

Growing demand

For updated information, please visit www.ibef.org

ADVANTAGE INDIA

Source: Report of the Task force on Financing Plan for Ports, Govt. of India, TechSci Research

Notes: FY – Indian Financial Year (April–March), NMDP – National Maritime Development Programme, FDI – Foreign Direct Investment, USD – US Dollar,

E – Estimates, MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate

Robust demand

• Port traffic in India is set to rise at a CAGR of 29.2 per cent over FY15–17

• CAGR in traffic over FY15–17 for:

• Non-major ports: 31.5 per cent to 815 MMT by 2017

• Major ports: 27.4 per cent to 943 MMT by 2017

Attractive opportunities

• Non-major ports are set to benefit from strong growth in India’s external trade

• Special Economic Zones are being developed in close proximity to several ports – comprising coal-based power plants, steel plants and oil refineries

Policy support

• The government initiated NMDP, aninitiative to develop the maritime sector;the planned outlay is USD11.8 billion

• FDI of 100 per cent under the automaticroute and a ten year tax holiday forenterprises engaged in ports

• Plans to create port capacity of around3200 MMT to handle the expected

• traffic of about 2500 MMT by 2020

Competitive

advantages

• India has a coastline which is more than 7,517 km long, interspersed with more than 200 ports

• Most cargo ships that sail between East Asia and America, Europe and Africa pass through Indian territorial waters

• India is the largest importer of thermal coal in the world

FY15

Cargo

traffic in

MMT:

1052.5

FY17E

Cargo

traffic in

MMT:

1,758

Advantage

India

PORTS

AUGUST 2015

MARKET OVERVIEW AND TRENDS

PORTS

AUGUST 2015


THERE ARE TWO BASIC CATEGORIES OF PORTS IN INDIA

Source: Ministry of Shipping; TechSci Research

PORTS

• There are 12 major ports in

the country; 6 on the

Eastern coast and 6 on the

Western coast

• Major ports are under the

jurisdiction of the

Government of India and

are governed by the Major

Port Trusts Act 1963,

except Ennore port, which

is administered under the

Companies Act 1956

• India has about 187 non-

major ports of which one-

third are operational

• Non-major ports come

under the jurisdiction of the

respective state

Governments’ Maritime

Boards (GMB)

Ports in India(2015)

Major Non-major (minor)

AUGUST 2015


MAJOR PORTS IN INDIA

Note: JNPT – Jawaharlal Nehru Port Trust

PORTS

Mumbai

JNPT

Kandla

Mormugao

New Mangalore

Cochin Tuticorin

Chennai

Ennore

Visakhapatnam

Paradip

Kolkata

AUGUST 2015


Cargo traffic at major ports (MMT)

Source: Ministry of Shipping, TechSci Research

Notes: MMT – Million Metric Tonnes,

CAGR – Compound Annual Growth Rate,

FY – Indian Financial Year (April–March)

Cargo traffic at major ports in India –

Stood at 581.3 MMT in FY15

Increased at a CAGR of 2.9 per cent during FY07–15

Cargo traffic in 2017 at major ports is expected to reach

943.1 MMT

CARGO TRAFFIC IS ON THE RISE … (1/2)

PORTS

AUGUST 2015

463.6519.2 530.4

561.0 569.8 560.1 545.6 555.3581.3

943.1

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY17 E

CAGR: 7.4%


Percentage share of ports

CARGO TRAFFIC IS ON THE RISE … (2/2)

PORTS

Non-major ports are evolving faster than major ports-

Non-major ports are gaining shares and a major chunk of

traffic has shifted from major ports to non-major ports

The contribution of non-major port’s traffic to total traffic

rose to 44.8 per cent in FY15 from 28.6 per cent in FY07

Cargo traffic at non-major ports (MMT)Cargo traffic at non-major ports –

Stood at 471.2 MMT in FY15

Cargo traffic has expanded at a CAGR of 12.3 per cent

during FY07–15 and is expected to grow annually at 15.9

per cent during FY07-17

Cargo traffic in 2017 at non-major ports is expected to reach

815.2 MMT


Notes: MMT – Million Metric Tonnes, CAGR – Compound Annual Growth Rate,

Indian Ports Association, FY – Indian Financial Year (April–March)

AUGUST 2015

71

.4%

71

.8%

71

.3%

66

.0%

64

.4%

61

.3%

58.4

%

57

.1%

55

.2%

53

.6%

28

.6%

28

.2%

28

.7%

34

.0%

35

.6%

38

.7%

41

.6%

42

.9%

44

.8%

46

.4%


Major Ports Non Major Ports

186.1 203.6 213.2288.9 314.9

353.0 387.9 417.1471.2

815.2


CAGR: 15.9%



* Note: Other cargo includes Fertiliser Raw Material (dry) and food-grains

Cargo at major ports in FY14

Solid Liquid

(petroleum, oil

and lubricants)

Container

Share: 45.7%Share: 33.7%

Share: 20.6%

Iron ore

Coal

Fertilizer

Other cargo

Share: 4.7%

Share: 18.7%

Share: 2.5%

Share: 19.7%

Cargo at major ports in FY15

Solid Liquid

(petroleum, oil

and lubricants)

Container

Share: 47.0%Share: 32.5%

Share: 22.5%

Iron ore

Coal

Fertilizer

Other cargo

Share: 2.8%

Share: 20.4%

Share: 2.8%

Share: 20.9%

CARGO PROFILE AT MAJOR PORTS IN INDIA … (1/2)

AUGUST 2015

PORTS


Cargo traffic at major ports (MMT)

Source: Ministry of Shipping; Indian Ports Association (IPA), TechSci Research

• Note: Other cargo in Solid includes fertiliser raw material (dry) and food-grains

• T- Tentative

Between FY07– FY15, cargo traffic grew at CAGR 2.9 per

cent

Over FY07–15, CAGR in the volume of different segments

was as fallows–

Solid cargo was 1.8 per cent

Liquid cargo was 2.6 per cent

Container cargo was 6.3 per cent

Cargo traffic during FY15 for solid, liquid, and container

cargo was 273, 188.9, and 119.4 MMT, respectively

CARGO PROFILE AT MAJOR PORTS IN INDIA … (2/2)

PORTS

AUGUST 2015

23

5.9

25

8.2

26

1.2

28

4.7

27

6.6

26

0.9

23

9.9

25

3.5

273

15

4.3

16

8.7

17

6.1

17

5.1

17

9.1

17

9.1

18

5.9

18

7.2

188.9

73.492.3 93.1

101.2 114.1 120.1 119.8 114.6119.4

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(T)

Solid Liquid Container


Capacity and utilisation at major ports (MMT)

Source: Indian Port Association, Ministry of

Shipping, TechSci Research

Note: MMT – Million Metric Tonnes

Capacity at major ports grew to 871.52 MMT in FY15,

implying a CAGR of 7.1 per cent since FY07

Despite capacity increasing, utilisation rates have been

gradually coming down post the global economic meltdown

in FY08

Utilisation rates of major ports in India are much above

world’s average

INCREASE IN CAPACITY OVER THE YEARS

PORTS

AUGUST 2015

50

4.8

53

2.1

574.8

616.7

67

0.1

68

9.8

74

4.9

80

0.5

2

87

1.5

2

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

0

100

200

300

400

500

600

700

800

900

1000

Capacity Utilisation- RHS

CAGR: 7.1%


Average turnaround time for major ports (in days)

Source: Ministry of Shipping;, Indian Port Association TechSci Research

Note: Turnaround time – Total time spent by a ship from entry into port until departure

* Indicates FY15-Tentaive

Average turnaround time is influenced by factors such as

type of cargo, parcel size and entrance channel

The average turnaround time improved to 4.0 days in FY15

from 3.8 days in FY14

DROP IN TURNAROUND TIME IN FY13

PORTS

AUGUST 2015

3.84.0

4.24.6

5.3

4.64.3

3.84.0

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15*


Increasing private

participation

• Strong growth potential, favourable investment climate, and sops provided by state

governments have encouraged domestic and foreign private players to enter the Indian

ports sector. In addition to the development of ports and terminals –

• The private sector has extensively participated in port logistics services

• By March’15, around 99 Public Private Partnership (PPP) projects are operational

with a total cost of around USD8813.8 million and capacity of 683.29 million tonnes

per annum.

• In FY15, total cargo handled at Indian ports increased by 8.2 per cent to 1052.5

million tonnes from 972.4 million tonnes during FY14

Setting up of port-based

SEZs

• SEZs are being developed in close proximity to several ports, thereby providing strategic

advantage to industries within these zones. Plants being set up include –

• Coal-based power plants to take advantage of imported coal

• Steel plants and edible oil refineries

• Development of SEZs in Mundra, Krishnapatnam, Rewas and few others is underway

NOTABLE TRENDS IN THE PORTS SECTOR … (1/2)

PORTS

Focus on draft depth

• All the greenfield ports are being developed at shores with natural deep drafts and the

existing ports are investing on improving their draft depth.

• Higher draft depth is required to accommodate large sized vessels. Due to the cost and

time advantage associated with the large sized vehicles, much of the traffic is shifting to

large vessels from smaller ones, especially in coal transportation


Notes: SEZ – Special Economic Zone, PPP – Public-Private Partnershi,p

AUGUST 2015


Specialist terminal-

based ports

• Terminalisation: Focus on terminals that deal with a particular type of cargo

• This is useful for handling specific cargo such as LNG that requires specific

equipment and hence high capital costs. Forming specialist terminals for such

cargo result in optimal use of resources and increased efficiencies

• Examples of specialist terminals: ICTT in Cochin, LNG terminal in Dahej Port

‘Landlord port’ model

• To promote private investments, the government has reformed the organisational model of

seaports –

• From: A ‘service port’ model where the port authority offers all the services

• To: A ‘landlord port’ model where the port authority acts as a regulator and landlord

while port operations are carried out by private companies

• Major ports following ‘landlord port’ model: JNPT, Chennai, Visakhapatnam and Tuticorin

NOTABLE TRENDS IN THE PORTS SECTOR … (2/2)

PORTS

Rising traffic at non

major ports

• With the increasing private participation in establishing minor ports. Cargo traffic handled

by the minor ports are outpacing cargo traffic at major ports, traffic on non major port has

expanded at a CAGR of 12.2 per cent during FY07–14

Source: TechSci Research

Notes: ICTT – International Container Transshipment Terminal, LNG – Liquefied Natural Gas

AUGUST 2015

PORTER FIVE FORCES ANALYSIS

PORTS

AUGUST 2015

1919

Source: PricewaterhouseCoopers, Techopak, TechSci Research

PORTER’S FIVE FORCES ANALYSIS

Competitive Rivalry

• Increasing trade activities brought by rising imports of commodities like

coal and crude to generate higher business and limit overall

competition as most ports handle specific geographies

• There have been instances of private managed ports attracting the

share of other ports (usually handled by government agencies) as in

the case of JNPT and Mumbai Port Trust. However, demand expected

to remain strong

Threat of New Entrants

• 100 per cent FDI under

automatic route and income tax

exemption (10 years) is

attracting foreign players.

However, higher capital

expenditure acts as a barrier

• With rising demand for port

infrastructure due to growing

imports (crude, coal) and

containerisation, the threat of

substitute products to remain

weak

Substitute Products

Bargaining Power of Suppliers

• Considerable capacities to be

added going forward. However,

demand to continue to remain

strong

Bargaining Power of Customers

• Imports to continue to remain

strong led by strong demand.

However considerable port

capacities to be added going

forward

Competitive

Rivalry

(Medium)

Threat of New

Entrants

(Medium)

Substitute

Products

(Low)

Bargaining

Power of

Customers

(Medium)

Bargaining

Power of

Suppliers

(Medium)

PORTS

For updated information, please visit www.ibef.orgAUGUST 2015

STRATEGIES ADOPTED

PORTS

AUGUST 2015

2121

STRATEGIES ADOPTED

• After having a strong advantage on India’s West coast, Adani Ports and Special Economic

Zone Ltd (APSEZ) is looking to strengthen its position by winning the bid of a new

container terminal at Ennore port located on the east coast. Furthermore Adani Ports has

acquired Dharma Port to replicate its development and growth on the eastern coast.

• Essar Ports Limited as a part of it strategic move to increase its potential on the east coast

has won the contract for the modernisation of three ports at Visakhapatnam

• Geographic diversification as in the case of Adani group acquiring coal mines(Australia

and Indonesia) and setting up coal terminal in Australia to take the benefit of increasing

coal imports in India

• Adani group, largest private port operator in India, is now venturing into providing allied

services like dredging. Its dredgers which were being used only at its own ports in the past

have now started taking work from other ports

• Adani group has also ventured into the container railway business becoming the largest

private link in the country. It conducts operations on a pan-india basis operating 6

container rakes

Pan-India presence

Geographic

diversification

Allied activities

Container train

operations

• Port authorities are modernising and upgrading port facilities to meet the needs of the port

users in competitive environmentModernisation

Source: Company website, TechSci Research


PORTS

AUGUST 2015

GROWTH DRIVERS

PORTS

AUGUST 2015



Note: NMDP - National Maritime Development Programme

SECTOR BENEFITS FROM STRONG DEMAND, PRIVATE PARTICIPATION

PORTS

Growing demand

Growing demand

Increasing trade

activities resulting

in container traffic

Rising demand for

coal and other

commodities

Growing crude

imports by the

country

Policy support

National Maritime

Development

Programme and

National Maritime

Agenda

FDI of up to 100

per cent under the

automatic route

Various sops and

incentives for

private players to

build ports

Increasing

investments

Increasing

investments in

building ports and

related activities

Private equity

supporting private

port developers

Increasing

investments by

foreign players

Innovation

Expanding port

development and

distribution

facilities in India

Use of modern

technology

Providing support

to global projects

from India

Resulting DrivingInviting

AUGUST 2015


India’s external trade flows (USD billion)

Source: Ministry of Commerce, TechSci Research

India’s total external trade is estimated to have grown to

USD757.1 billion in FY15, implying a CAGR of 7.56 per cent

since FY09

Ports handle almost 95 per cent of trade volumes; thus

rising trade has contributed significantly to cargo traffic

INDIA’S PORTS ARE BENEFITTING FROM STRONG GROWTH IN EXTERNAL TRADE … (1/2)

PORTS

AUGUST 2015

185 179

250

306 300 314 310304 288

370

489 491450 448

0

100

200

300

400

500

600

FY09 FY10 FY11 FY12 FY13 FY14 FY15

Exports Imports

CAGR: 7.56%


Container traffic at major ports (MMT)

Source: Indian Ports Association, TechSci Research


T-Tentaive

Increasing trade is translating into higher demand for

containerisation due to their efficiency

During FY07–15, container traffic rose to 119.4 MMT,

implying a CAGR of 6.3 per cent

INDIA’S PORTS ARE BENEFITTING FROM STRONG GROWTH IN EXTERNAL TRADE … (2/2)

PORTS

AUGUST 2015

73.4

92.3 93.1101.2

114.1120.1 119.8

114.6119.4

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 (T)

CAGR: 6.3%


Crude imports (MMT)

Source: Handbook of Indian Statistics (RBI),

Petroleum Planning and Analysis Cell, TechSci Research

Notes: MMT – Million Metric Tonnes,

P Indicates Provisional

A consequence of strong GDP growth has been rising

energy demand; the country currently meets about 75 per

cent of total crude oil demand by imports

India’s crude imports touched 190 MMT in FY14, implying a

CAGR of 6.9 per cent over FY07–15

PORTS TO BENEFIT FROM GROWING CRUDE IMPORTS … (1/2)

PORTS

AUGUST 2015

112122

133

159 164172

185 189 189

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(P)


POL traffic (MMT)


Notes: POL – Petroleum, Oil, and Lubricants,

MMT – Million Metric Tonnes

P-Provisional

Private ports have been especially good at attracting crude

import traffic

POL have been the major contributors to total traffic at ports

and contributed 32.5 per cent in FY15

POL traffic at both major and non-major ports added up to

345.4 MMT in FY15, implying a CAGR of 4.9 per cent over

FY07–15

PORTS TO BENEFIT FROM GROWING CRUDE IMPORTS … (2/2)

PORTS

AUGUST 2015

15

4.3

16

8.7

17

6.1

17

5.1

17

9.1

17

9.1

18

5.9

18

7.2

18

8.9

81

.2 91

.0

97

.8

13

7.7

14

5.4

15

6.3

16

8.6

16

9.8

15

6.5


Major Ports Minor Ports

CAGR: 4.9%


Coal supply gap (import requirement) (MMT)

Source: Ministry of Coal, TechSci Research

Notes: The figures from FY9–14 in the above graph are as per the data

provided by Coal Ministry Annual Reports, and the figure for FY17 is

taken from the Planning Commission Report data sourced from Coal

Ministry Annual Report

* Indicated FY15 data is upto November’14

India is the largest importer of thermal coal in the world and

this is expected to grow due to increased demand for power

as coal-based power stations were the biggest contributors.

A major chunk of this import is transported by sea

Coal imports (both thermal and cooking) are estimated to

have fallen to 168.5 in FY14 due to the increase in the coal

production in the country. Further, The government has

given the target of 143.28 million tonnes of coal supply gap

which would be filled by import.

With growing demand for power, coal imports are expected

to be at 185.5 MMT in FY17

INCREASING COAL IMPORTS SET TO DRIVE RISING CARGO TRAFFIC … (1/2)

PORTS

Notes:: GW – Gigawatt, MMT – Million Metric Tonnes

AUGUST 2015

59.98

83.48

132.18

160.88

192.54

168.5

137.6

0

50

100

150

200

250

FY09 FY10 FY11 FY12 FY13 FY14 FY15 *

CAGR:

14.84%


Coal cargo traffic (MMT)



Increasing coal imports are set to drive coal cargo traffic

upwards at both major and non-major ports

With private ports boosting their coal handling capacities,

non-major ports look set to handle majority of coal imports

in the future

Coal cargo traffic has grown at a CAGR of 18.0 per cent

over FY07–15 to reach 277.4 MMT.

Total coal handled by India’s 12 major ports jumped to

118.7 million tonnes in FY15 from 104.1 million tonnes in

FY14

Thermal coal imports through the ports leaped 22 per cent

to 71.6 million tonnes, while shipments of cooking coal,

used in making steel, rose 18.3 per cent to 33.1 million

tonnes

Coal cargo traffic by minor ports crossed the total traffic of

major ports by 2013. By 2015, the coal traffic by minor ports

reached 158.7 MMT

INCREASING COAL IMPORTS SET TO DRIVE RISING CARGO TRAFFIC … (2/2)

PORTS

AUGUST 2015

59

.9

64

.9

70

.4

71

.7

72

.7

78

.8

86

.6

10

4.1

11

8.7

14

.0

15

.4

21

.5

41

.3

58

.5 79

.0 10

9.3 12

6.3 15

8.7



CAGR: 18.0%


Focus on increasing

capacity• To create a port capacity of around 3,200 MT to handle the expected traffic of about 2,500

MT by 2020

Increasing investments• Proposed investments in major ports by 2020 are expected to total USD18.6 billion, while

those in non-major ports would be USD28.5 billion

PORTS

World-class

infrastructure

• To implement full mechanisation of cargo handling and movement at ports, thereby

bringing Indian ports on a par with the best international ports in terms of performance and

capacity


Strategically building

ports

• To develop two major ports (one each on East and West coast) to promote trade as well

as two hub ports (one each on the West coast and the East coast) – Mumbai (JNPT),

Kochi, Chennai, and Visakhapatnam

Bringing ports under

regulator

• To establish a port regulator for all ports in order to set, monitor, and regulate service

levels, technical and performance standards

NATIONAL MARITIME AGENDA 2010–2020 … (1/2)

Landlord ports• Major ports have been working towards implementing ‘Landlord port‘ concept duly limiting

their role to maintenance of channels and basic infrastructure leaving the development

operation management of terminal and cargo handling facilities to the private sector

AUGUST 2015



Note: EXIM - Export-Import

National Maritime Agenda 2010–20 is aimed at the all-round development of the Indian maritime sector

16 PPP projects, which involve capacity addition of 159 MTPA and investment of USD3092.4 million, have been awarded as

of 2013-14

Agenda involves investments in new projects at major ports of around USD18.6 billion, of which USD12.4 billion is expected

to come from private sector players and the remaining from budgetary allocation

By 2015, National Maritime Agenda aims to increase the share of Indian seafarers in the global shipping industry from 6–7

per cent to at least 9 per cent

The government, through this policy, aims to increase the tonnage under the Indian flag and Indian control as well as the

share of Indian ships in EXIM trade

The government is also working to float a specialised Maritime Finance Corporation with the equity of ports and financial

institutions to fund the Port projects

PORTS

NATIONAL MARITIME AGENDA 2010–2020 … (2/2)

AUGUST 2015


12TH FIVE-YEAR PLAN

Planned capacity 12th Five-Year Plan (MMT)

The 12th Five-Year Plan (2012–17) is focused on the development of major and non-major ports through public and private

investments

The proposed outlay for port sector in the plan, excluding private investment, is USD4.9 billion

The overall projected traffic of 1,758.3 million tonnes to be achieved by FY17, the total capacity of the port sector is

envisaged to be 2,289.04 million tonnes by the end of 2017

The government anticipates private sector investment of around USD28.8 billion during the 12th Plan Period.

Projected traffic12th Five-Year Plan (MMT)

PORTS

689.9

544.7

1,229.2

1,059.8

Major Ports Non- Major Ports

FY12 FY17E

560.1

370.0

943.1

815.2

Major Ports Non- Major Ports

FY12 FY17E

AUGUST 2015


De-licensing and tax

holidays

• The government has allowed FDI of up to 100 per cent under the automatic route for

projects related to the construction and maintenance of ports and harbours

• A 10-year tax holiday to enterprises engaged in the business of developing, maintaining,

and operating ports, inland waterways, and inland ports


Note: FDI – Foreign Direct Investment

FAVOURABLE POLICIES ASSISTING THE PRIVATE SECTOR

PORTS

Price flexibility• Private ports enjoy price flexibility, as the government allows non-major ports to determine

their own tariffs in consultation with the State Maritime Boards; at major ports, tariffs are

regulated by the Tariff Authority for Major Ports (TAMP)

Model Concession

Agreement (MCA)

• An MCA has been finalised to bring transparency and uniformity to contractual

agreements that major ports would enter into with selected bidders for projects under the

Build, Operate and Transfer (BOT) model

Monopoly prevention

• The Ministry of Shipping has passed a regulation to prevent monopoly power –

• An existing private operator (at a port) cannot bid for the next terminal to handle

similar kind of cargo at the same port

Favourable system

• The system for security clearance for ports being streamline and made faster

• Expansion of existing framework to attract participation from the private sector for

development of infrastructure facilities such as dredging, road infrastructure, creation of

SEZ and development of integrated parking zones in the port area

AUGUST 2015


STRONG PRIVATE SECTOR PARTICIPATION IN PORTS PROJECTS … (1/3)

39 Public Private Partnership (PPP) projects are operational at a cost of around USD2219.4 Million and capacity of 240.72

Million Tonnes Per Annum (MTPA).

32 PPP projects at an estimated cost of around USD3917.6 Million and capacity 264.77 Million Tonnes Per Annum (MTPA)

awarded and are under implementation.

Total 91 projects with involving capacity of 521.45MMPA have been awarded during 2012-16 (Upto 30th June, 2015)

15 PPP projects with an estimated cost of about USD1210.6 Million and capacity 69.47 Million Tonnes Per Annum (MTPA)

have been awarded/approved and 13 projects at an estimated cost of about USD1466.2 Million and Capacity 108.35 Million

Tonnes Per Annum (MTPA) are likely to be awarded/approved by 31.03.2015.

10 PPP projects with an estimated investment of around USD1.5 billion and capacity of 95.11 million tonnes per annum

have been awarded in FY 15.

PORTS


Private investment

Greenfield projects

Private terminals

AUGUST 2015



Notes: NSICT – Nhava Sheva International Container Terminal, Mumbai,

ICTT – International Container Transshipment Terminal, SPM – Single Point Mooring

PORTS

Terminals in major ports

with private sector

involvement

Port agency Estimated cost

(USD million)

Container terminal, Ennore Ennore 293.1

LNG terminal, Cochin Cochin Port Trust 729.1

Container terminal, NSICT JNPT 156.3

Oil jetty related facilities

(Vadinar)Kandla Port Trust 156.3

Third container terminal

(Mumbai)JNPT 187.5

Crude oil handling facility

(Cochin)Cochin Port Trust 146.5

ICTT at Vallarpadam

(Cochin)Cochin Port Trust 262.9

Construction of SPM captive

berth (Paradip)Paradip Port Trust 104.2

Development of second

container terminal (Chennai)Chennai Port Trust 103.1

Key private sector

companies

Ports they

developed

Maersk JNPT (Mumbai)

P&O Ports JNPT,

(Mumbai and Chennai)

Dubai Ports International (Cochin and

Vishakhapatnam)

PSA Singapore Tuticorin

Adani Mundra

Maersk Pipavav

Navyuga Engineering

Company LtdKrishnapatnam

DVS Raju group Gangavaram

JSW Jaigarh

Marg Karaikal


AUGUST 2015



Notes: NSICT – Nhava Sheva International Container Terminal, Mumbai,

ICTT – International Container Transshipment Terminal, SPM – Single Point Mooring

PORTS

Terminals in major ports with

private sector involvement

Port agency Capacity (Million

tonnes)

Estimated cost

(USD million)

Development & Operation of

International Container Transshipment

Terminal (ICTT) at Vallar-padam

Cochin Port12.5 to 40 MMT in

Phases353

Setting up of LNG Port &

ReGasification Terminal at

Puthuvypeen by Cochin. / Cochin Port

Trust

Cochin Port 5 MMPTA 691.1

Multi-User Liquid Terminal (MULT) at

Puthuvypeen SEZ (International

Bunkering Terminal at Cochin)

Cochin Port 4.10 MMTPA 38.4

Conversion of berth No. 8 as container

terminal onTuticorin 7.2 MTPA 52.03

Development of North Cargo Berth – II

on DBFOT basis.Tuticorin 7.0 MTPA 55.36

Enhancement of Cargo Handling

capacity by installing rapid in motion

wagon loading facility by SWPL

Mormugao Port Trust 2.50 MTPA 7.5


AUGUST 2015


PORTS

Projected Completed During April 2014 to March 2015

AUGUST 2015

Development of Coal handling terminal on DBFOT basis (4.61 MTPA) completed during June 2014 at MGPT.

Enhancement of cargo handling capacity by installing rapid in motion wagon loading facility by SWPL (2.50 MTPA), completed

during July 2014 at MGPT

Development of Dry Bulk Terminal off Terka near Tuna (14.11 MTPA) completed during December 2014 at KPT.

Increase in capacity due to productivity of CBI & CBII (1.00 MTPA)

Development of WQ6 berth for 225m length and 22.5m width for handling dry bulk cargo on DBOFT basis (6.00) at VPT.

Development of EQ-10 berth in inner harbour for handling liquid cargoes and chemicals on DBOFT basis (1.84 MTPA) at VPT.

Increase in capacity at CICTPL coal berth due to productivity (1.00 MTPA) at KPL.

Increase in capacity at ETTPL berth due to productivity (1.00 MTPA) at KPL.

Increase in capacity at General Cargo berth (2.00 MTPA) at KPL.

Installation of floating cranes for handling the cargo vessels (2.49 MTPA) at VoCPT.

Construction of Mooring Dolphins at Liquid Cargo Jetty (1.00 MTPA) at JNPT

Increase in capacity due to deepening and widening of channel (10.20 MTPA) at JNPT.



PRIVATE EQUITY INTEREST IN INDIAN PORTS/SHIPPING REMAINS HEALTHY

PORTS

Target Acquirer Value (USD million) Year

The Dhamra Port Co Ltd Adani Ports and Special Economic Zone 926.0 2014

Samson Maritime Ltd Kotak Private Equity Group 126.0 2014

JSW Infrastructure Eton Park Capital 125.0 2010

Fourcee Infrastructure General Atlantic LLC 104.0 2012

Mundra Port 3I Group, GIC Real Estate 100.0 NA

Karaikal Port Pvt Ltd (Second round) Ascent Capital 41.7 NA

Ocean Sparkle Ltd Standard Chartered PE 41.6 2012

Karaikal Port Pvt Ltd (First round) IDFC Project Equity 32.6 NA

Gujarat Pipavav Port Ltd IDFC 28.5 NA

Karaikal Port Pvt Ltd Standard Chartered PE (Mauritius) II Ltd 27.1 2012

20Cube Logistics Zephyr Peacock India 17.0 2013

Continental Warehousing Nhava

Sheva

Aureos India Fund,

Eplanet Venture16.4 NA

PE deals since 2014

Source: E&Y, Grant Thornton, Thompson ONE Banker, TechSci Research

AUGUST 2015

OPPORTUNITIES

PORTS

AUGUST 2015


OPPORTUNITIES

PORTS

Increasing scope for private ports Ship repair facilities at ports Port support services

• With rising demand for port

infrastructure due to growing imports

(crude, coal) and containerisation,

public ports (major ports) will fall short of

meeting demand

• This provides private ports with an

opportunity to serve the spill-off demand

from major ports and increase their

capacities in line with forecasted new

demand

• Dry docks are necessary to provide ship

repair facilities. Out of all major ports,

Kolkata has five dry docks, Mumbai and

Visakhapatnam have two; the rest have

one or no dock at all

• Given the positive outlook for cargo

traffic, and the resulting increase in

number of vessels visiting ports,

demand for ship repair services will go

up. This will provide opportunities to

build new dry docks and setup ancillary

repair facilities

• Operation and maintenance services

such as pilotage, dredging, harbouring

and provision of marine assets such as

barges and dredgers are expected to

increase in coming years

• Increasing investments and cargo traffic

point to a healthy outlook for port

support services

• These include Operation and

Maintenance (O&M) services like

pilotage, harbouring and provision of

marine assets like barges and dredgers


Note: O&M – Operations & Maintenance

AUGUST 2015

SUCCESS STORIES

PORTS

AUGUST 2015


Net sales (USD million)

Source: Company sources, including Annual Reports and news

items; Assorted news articles; TechSci Research

Notes: POL – Petroleum, Oil and Lubricants,

MTPA – Million Tonnes Per Annum,


* Indicates P/L Before Int., Excpt. Items & Tax

Mundra Port and Special Economic Zone Ltd was renamed

as Adani Ports & Special Economic Zone Ltd

It is the largest private port in India in terms of volume

Net Sales (FY15): USD1020.6 million

Operating profit*: USD473.9 million

Adani’s Mundra Port crosses 100 MMT mark of cargo

handling in FY14. The only Commercial port in India to

achieve 100 MMT traffic. Further, cargo traffic of the

company touched 144 MMT in FY15

Container traffic contributed the most, followed by

coal and edible oil, chemicals and POL

Has the world’s largest fully mechanised coal terminal with

a capacity of 60 MTPA

Handles the second highest container traffic in India

During FY08–15, total revenue rose to USD1020.6 million,

implying a CAGR of 25.96 per cent

MUNDRA: THE LARGEST PRIVATE PORT IN INDIA … (1/2)

PORTS

AUGUST 2015

202.9255.7

300.7

439.5

575.4658.6

801.2

1020.6

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15


Jawaharlal Nehru Port Trust (JNPT) has the third highest cargo traffic and the highest container traffic in the country

It is a container-focused port and having container traffic of 56.93 MMT in FY15

Handled 62.2 million tonnes of cargo in FY14 (including 4.16 TEU's containers)

Poised to handle 10 million TEUs of containers by the year FY16

Traffic handled at JNPT for FY15 was 63.8 MMT

Distribution of JNPT’s container traffic for FY12 across its various terminals was as follows –

Jawaharlal Nehru Port Container Terminal (JNPCT): 1.21 million TEUs

Nhava Sheva International Container Terminal (NSICT): 1.40 MMT

APM Terminals: 1.9 MMT

PORTS

Notes: TEU – Twenty-Foot Equivalent Unit,


JNPT: MAJOR PORT WITH THE LARGEST CONTAINER CAPACITY … (1/2)

AUGUST 2015


Cargo profile of JNPT (FY15)

Source: JNPT’s website, Indian Ports Association,

Ministry of Shipping, TechSci Research

Notes: POL – Petroleum, Oil, and Lubricants,

MMT – Million Metric Tonnes,

TEU – Twenty-Foot Equivalent Unit,

MTPA – Million Tonnes Per Annum

JNPT was developed to relieve the pressure of Mumbai port

and was commissioned in 1989

It serves most of North India and has good hinterland

connectivity through road and rail networks

JNPT, with a capacity of 4.2 million TEU, handles over 55

per cent of India’s container traffic and is ranked 24th among

global container ports

JNPT is a pioneer in involving private sector participation in

major ports and operates under a landlord model; NSCIT is

the first private terminal in the country

The port is poised to handle 10 million TEUs of containers

by 2015–16

Proposed capacity additions by FY17 –

Marine chemical: 30 MTPA

Container terminal: 58 MTPA

PORTS

JNPT: MAJOR PORT WITH THE LARGEST CONTAINER CAPACITY … (2/2)

AUGUST 2015

7%

89%

4%

POL

Container

Other


Cargo handled at major and non-major port of

Gujarat (MMT)

Source: Shipping Ministry,

Planning Commission, TechSci Research

* Indicated FY15- upto September14

Gujarat is endowed with 1,215 kilo meters of coastline i.e.

1/6th of total Indian coastline

The state has 42 ports of which 41 are non major, while

Kandla is the sole major port

During FY07–14, cargo traffic in Gujarat increased at a

CAGR of 11.6 per cent to reach 396.96 MMT in FY14.

Further, till September’14 the traffic reached 211.48 MMT.

Favourable policies of Gujarat government helped state in

gaining private investors interest in port related activities

GUJARAT: PORT HUB OF INDIA ... (1/2)

PORTS

AUGUST 2015

53 65 72 80 82

83 94

87

47

131151 153

206231

259

288310

165

FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15*


CAGR: 11.6%


During FY14, Gujarat added 21 million tonnes of capacity at non-major ports, augmenting the capacity of non-major ports to

387 million tonnes

During the 12th Five-Year Plan, the government estimates investment of about USD9.4 billion in the port sector by private

players in Gujarat

With seven ports under construction and five proposed ports, Gujarat has the highest number of privately operated

greenfield ports in India

PORTS

Source: Shipping Ministry,

Planning Commission, TechSci Research

GUJARAT: PORT HUB OF INDIA ... (2/2)

Greenfield ports Developer

Port of Pipavav GMB and Gujarat Pipavav Port Ltd

Mundra Port Gujarat Adani Port Ltd

Dahej Port Petronet LNG Ltd and GMB

Hazira Port Shell Gas B.V.

AUGUST 2015

USEFUL INFORMATION

PORTS

AUGUST 2015

4848

INDUSTRY ASSOCIATIONS


PORTS

Indian Ports Association (IPA)

1st floor, South Tower, NBCC Place

Bhishma Pitamah Marg, Lodi Road

New Delhi – 110 003

Phone: 91-11-24369061, 24369063, 24368334

Fax: 91-11-24365866

E-mail: [email protected], [email protected]

Indian Private Ports & Terminals Association

Darabshaw House, Level-1, N.M. Marg,

Ballard Estate, Mumbai 400 001, India

Tel. No: 022-22610599

Fax. No: 022-22621405

Email: [email protected]

AUGUST 2015


Major and non-major ports do not have a strict association with traffic volumes. The classification has more of an

administrative significance

Cargo traffic includes both loading (export) and unloading (imports) of goods

Containerisation is the increased use of container for transporting non-bulk goods. It leads to increased efficiency (both

time and money)

Turnaround time is the total time spent by a ship from entry into port till departure

Twenty Equivalent Units (TEU) is a standard measure of containers which are 20 feet in length and 8 feet in width; the

height can vary

Draft is the vertical distance between waterline and the bottom of the ship. It determines the depth of water a ship or boat

can safely navigate. Higher capacity ships will need higher draft, hence ports with higher natural draft will attract bigger

ships

Waterfront availability is the length of the water line on the coast where ships can rest and the goods are unloaded. Longer

waterfront lengths reduce waiting time and help raise capacity

Terminals are certain sections of the ports where different types of cargo are unloaded

Single Point Mooring (SPM) is a loading buoy anchored offshore that serves as a mooring point and interconnect for

tankers loading or offloading gas or fluid product

A dry dock is a narrow basin that can be flooded to allow a ship to be floated in, then drained to allow that ship to come to

rest on a dry platform. Dry docks are used for construction, maintenance and repair of ships

PORTS

NOTES

AUGUST 2015

5050

GLOSSARY … (1/2)


FY: Indian Financial Year (April to March) – So FY11 implies April 2010 to March 2011

USD: US Dollar

FDI: Foreign Direct Investment

IPA: Indian Ports Association

NMDP: National Maritime Development Programme

POL: Petroleum, Oil & Lubricants

SEZ: Special Economic Zone

CAGR: Compounded Annual Growth Rate

ICTT: International Container Transshipment Terminal

TEU: Twenty-Foot Equivalent Unit

MMTPA: Million Metric Tonnes Per Annum

MMT: Million Metric Tonnes

PORTS

AUGUST 2015

5151

GLOSSARY … (2/2)


GOI: Government of India

NSICT: Nhava Sheva International Container Terminal, Mumbai

O&M: Operation and Maintenance services

LNG: Liquefied Natural Gas

Wherever applicable, numbers have been rounded off to the nearest whole number

PORTS

AUGUST 2015


EXCHANGE RATES

PORTS

Average for the year

Exchange rates (Fiscal Year) Exchange rates (Calendar Year)

AUGUST 2015

Year INR equivalent of one USD

2004–05 44.81

2005–06 44.14

2006–07 45.14

2007–08 40.27

2008–09 46.14

2009–10 47.42

2010–11 45.62

2011–12 46.88

2012–13 54.31

2013–14 60.28

2014-15(Expected) 60.28

Year INR equivalent of one USD

2005 43.98

2006 45.18

2007 41.34

2008 43.62

2009 48.42

2010 45.72

2011 46.85

2012 53.46

2013 58.44

2014 61.03

2015(Expected) 61.03

5353

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prepared by TechSci in consultation with IBEF.

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This presentation is for information purposes only. While due care has been taken during the compilation of this

presentation to ensure that the information is accurate to the best of TechSci and IBEF’s knowledge and belief, the

content is not to be construed in any manner whatsoever as a substitute for professional advice.

TechSci and IBEF neither recommend nor endorse any specific products or services that may have been mentioned in

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DISCLAIMER

PORTS

AUGUST 2015

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